Apache Corporation (NYSE:APA) announced the purchase of a private oil and gas company with an extensive acreage in the Anadarko Basin in Texas and Oklahoma. This purchase has increased the company's bet on the future value of numerous oil and gas plays in this area. (To know more about oil and gas, read Oil And Gas Industry Primer.)

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The Purchase
Apache Corporation is buying Cordillera Energy Partners III LLC for total consideration of $2.85 billion. The company will pay $2.25 billion in cash and issue 6.273 million shares of its common stock with an estimated value of $600 million. Apache expects the acquisition to close early in the second quarter of 2012.

Cordillera Energy Partners III LLC was formed by Cordillera Energy Partners in 2007 with funding from EnCap Investments and several other institutional investors. This was the third energy company formed by Cordillera Energy Partners.

Cordillera Energy Partners I LLC was started in 2000, and sold in 2003 to Patina Oil and Gas, while Cordillera Energy Partners II LLC was started in 2004 and sold in pieces in 2008 to Forest Oil (NYSE:FST) and Devon Energy (NYSE:DVN).

What is Apache Corporation Getting?
Apache Corporation is picking up 254,000 net acres in the Anadarko Basin, increasing the company's total acreage here to 487,000 net acres. The company also adds production of 18,000 barrels of oil equivalent (BOE) per day, with approximately 53% of this production composed of oil and natural gas liquids. The properties have 88 million BOE of proved reserves and Apache Corporation estimates that the proved, probable and possible reserves total 390 million BOE.

The company has access to a smorgasbord of productive hydrocarbon formations across the acquired acreage, including the Granite Wash, Tonkawa, Cleveland and Marmaton plays. The liquids content of these plays in the area where Apache Corporation operates ranges from 48 to 74%.

The oil and gas giant estimates that returns from these four plays will be between 25 and 42%, and expects to use horizontal drilling here over the next year to increase production to 70,000 BOE per day in the company's central region by the end of 2012.

Other Operators
The Granite Wash and other plays in the Anadarko Basin have attracted many operators over the last few years. Linn Energy (Nasdaq:LINE) has accumulated extensive acreage exposed to this play and has allocated 53% of its $880 million capital budget towards the Granite Wash. This will cover the drilling of 75 horizontal wells in 2012.

QEP Resources (NYSE:QEP) also likes the Granite Wash and has acreage in Texas exposed to this play. The company estimates its resource potential here at 103 Bcfe.

The Bottom Line
Apache Corporation is not afraid to make acquisitions that fits the company's strategic outlook and has found another candidate in Cordillera Energy Partners III LLC. The company's track record indicates that this one will be successful like previous purchases. (For additional reading, check out A Guide To Investing In Oil Markets.)

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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.